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Chinese e-commerce giant Alibaba Group (BABA - Free Report) disappointed investors with its first-quarter fiscal 2022 results before the opening bell on Aug 3. The company missed revenue estimates for the first time in more than two years but outpaced earnings estimates.
Earnings of $2.57 per ADS beat the Zacks Consensus Estimate of $1.74 and increased 12% from the year-ago earnings. Revenues climbed 34% to $31.9 billion but fell short of the consensus mark of $32.64 billion. The miss can be traced to rising competition from smaller players such as JD.Com (JD - Free Report) and Pinduoduo (PDD - Free Report) .
The company’s cloud computing revenues grew 29% year over year while the core e-commerce business rose 35%. The digital media and entertainment sector saw revenue growth of 15%. Notably, the average daily subscriber base of the streaming video business Youku increased 17% year over year (read: ETF Areas in Spotlight as Delta Variant Cases Rise).
Annual active consumers globally increased 45 million from the last quarter to 1.18 billion, including 912 million consumers in China.
ETFs in Focus
ETFs having the highest allocation to the Chinese e-commerce giant will be in focus in the days ahead. Below we have highlighted six ETFs in detail (see: all the Technology ETFs here):
Invesco BLDRS Emerging Markets 50 ADR Index Fund
The product offers exposure to 50 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 41% of the portfolio is allotted to Chinese firms, with Alibaba occupying the second position at 19.7%. Taiwan, India and Brazil round off the next three spots in terms of country exposure. Consumer discretionary, information technology, financials and communication services are the top four sectors. ADRE has amassed $211.5 million in its asset base while trading in a lower volume of about 13,000 shares. It charges 30 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
This ETF targets the Chinese stock market and follows the MSCI China Index. Holding 602 securities in its basket, Alibaba takes the second spot with 13.2% share. From a sector look, about 33.2% of the portfolio is allotted to consumer discretionary while communication (17.5%) and financials (13.3%) round off the next two spots. The fund has amassed $6.2 billion in its asset base while charging 59 bps in annual fees. Volume is also solid as it exchanges nearly 3.3 million shares daily on average. The ETF has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read: How Will China ETFs React to the Latest Exports Data?).
This product follows the FTSE China Capped Index, charging investors 19 bps in annual fees. It holds 897 stocks in its basket with Alibaba taking the second spot at 12.7%. Consumer discretionary, communication services and financials are the top three sectors. The ETF has amassed $122.9 million in its asset base and sees an average daily volume of 34,000 shares. It has a Zacks ETF Rank #4.
This product follows the S&P China BMI Index, charging investors 59 bps in annual points. It holds 834 stocks in its basket with Alibaba taking the second spot at 11.5%. From a sector look, consumer discretionary takes the largest share at 29.9%, while communication services and financials round off the next two spots. The ETF has amassed $1.8 billion in its asset base and sees an average daily volume of 90,000 shares. It has a Zacks ETF Rank #4 with a Medium risk outlook.
This fund follows the MSCI Emerging Markets ESG Leaders Index, a capitalization-weighted index which provides exposure to companies with high Environmental, Social and Governance performance relative to their sector peers. Holding 496 stocks in its basket, Alibaba occupies the second position at 8.3% of assets. The ETF has accumulated $16.4 million in its asset base and trades in an average daily volume of 4,000 shares. It charges 20 bps in annual fees (read: Global Economy to See Fastest Growth in 80 Years: 5 ETF Picks).
This fund offers exposure to companies based in China and listed in Mainland China, Hong Kong, and the United States. It tracks the MSCI China All Shares Index, charging 49 bps in annual fees. Holding 266 securities in its basket, Alibaba is the top firm accounting for 9.7% share. Consumer discretionary and financials take the top two spots at 29.7% and 17.8%, respectively, from a sector look. The product has been able to manage $20.5 million in its asset base and trades in volume of 3,000 shares a day on average. It has a Zacks ETF Rank #4.
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Alibaba Misses Revenue Estimates: ETFs in Focus
Chinese e-commerce giant Alibaba Group (BABA - Free Report) disappointed investors with its first-quarter fiscal 2022 results before the opening bell on Aug 3. The company missed revenue estimates for the first time in more than two years but outpaced earnings estimates.
Earnings of $2.57 per ADS beat the Zacks Consensus Estimate of $1.74 and increased 12% from the year-ago earnings. Revenues climbed 34% to $31.9 billion but fell short of the consensus mark of $32.64 billion. The miss can be traced to rising competition from smaller players such as JD.Com (JD - Free Report) and Pinduoduo (PDD - Free Report) .
The company’s cloud computing revenues grew 29% year over year while the core e-commerce business rose 35%. The digital media and entertainment sector saw revenue growth of 15%. Notably, the average daily subscriber base of the streaming video business Youku increased 17% year over year (read: ETF Areas in Spotlight as Delta Variant Cases Rise).
Annual active consumers globally increased 45 million from the last quarter to 1.18 billion, including 912 million consumers in China.
ETFs in Focus
ETFs having the highest allocation to the Chinese e-commerce giant will be in focus in the days ahead. Below we have highlighted six ETFs in detail (see: all the Technology ETFs here):
Invesco BLDRS Emerging Markets 50 ADR Index Fund
The product offers exposure to 50 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 41% of the portfolio is allotted to Chinese firms, with Alibaba occupying the second position at 19.7%. Taiwan, India and Brazil round off the next three spots in terms of country exposure. Consumer discretionary, information technology, financials and communication services are the top four sectors. ADRE has amassed $211.5 million in its asset base while trading in a lower volume of about 13,000 shares. It charges 30 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
iShares MSCI China ETF (MCHI - Free Report)
This ETF targets the Chinese stock market and follows the MSCI China Index. Holding 602 securities in its basket, Alibaba takes the second spot with 13.2% share. From a sector look, about 33.2% of the portfolio is allotted to consumer discretionary while communication (17.5%) and financials (13.3%) round off the next two spots. The fund has amassed $6.2 billion in its asset base while charging 59 bps in annual fees. Volume is also solid as it exchanges nearly 3.3 million shares daily on average. The ETF has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read: How Will China ETFs React to the Latest Exports Data?).
Franklin FTSE China ETF (FLCH - Free Report)
This product follows the FTSE China Capped Index, charging investors 19 bps in annual fees. It holds 897 stocks in its basket with Alibaba taking the second spot at 12.7%. Consumer discretionary, communication services and financials are the top three sectors. The ETF has amassed $122.9 million in its asset base and sees an average daily volume of 34,000 shares. It has a Zacks ETF Rank #4.
SPDR S&P China ETF (GXC - Free Report)
This product follows the S&P China BMI Index, charging investors 59 bps in annual points. It holds 834 stocks in its basket with Alibaba taking the second spot at 11.5%. From a sector look, consumer discretionary takes the largest share at 29.9%, while communication services and financials round off the next two spots. The ETF has amassed $1.8 billion in its asset base and sees an average daily volume of 90,000 shares. It has a Zacks ETF Rank #4 with a Medium risk outlook.
MSCI Emerging Markets ESG Leaders Equity ETF (EMSG - Free Report)
This fund follows the MSCI Emerging Markets ESG Leaders Index, a capitalization-weighted index which provides exposure to companies with high Environmental, Social and Governance performance relative to their sector peers. Holding 496 stocks in its basket, Alibaba occupies the second position at 8.3% of assets. The ETF has accumulated $16.4 million in its asset base and trades in an average daily volume of 4,000 shares. It charges 20 bps in annual fees (read: Global Economy to See Fastest Growth in 80 Years: 5 ETF Picks).
KraneShares MSCI All China Index ETF (KALL - Free Report)
This fund offers exposure to companies based in China and listed in Mainland China, Hong Kong, and the United States. It tracks the MSCI China All Shares Index, charging 49 bps in annual fees. Holding 266 securities in its basket, Alibaba is the top firm accounting for 9.7% share. Consumer discretionary and financials take the top two spots at 29.7% and 17.8%, respectively, from a sector look. The product has been able to manage $20.5 million in its asset base and trades in volume of 3,000 shares a day on average. It has a Zacks ETF Rank #4.